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Tycoon criticized as “unprofessional” for HAGL restructuring plan

August 31, 2013

VietNamNet Bridge – The decision by Hoang Anh Gia Lai Group to undergo a “major operation” by selling real estate projects has been described as an unwise move.

HAGL Group's Chair Doan Nguyen Duc. In June 2013, Hoang Anh Gia Lai Group, one of the most powerful conglomerates in Vietnam announced the sale of six hydropower plant projects and two real estate projects under the construction.

The sale of the hydropower plant projects would help reduce the debts by VND1.8 trillion and brought VND2.09 trillion to Hoang Anh Gia Lai.

The move by Hoang Anh Gia Lai to quit the real estate market has raised controversy. Some analysts commented that Doan Nguyen Duc, President of Hoang Anh Gia Lai, took a daring move when admitting the failure of the investment deals in the real estate sector, and that it would be better to give up once the investments cannot bring profits.

Meanwhile, Duc, who was ranked the 29th out of the 30 Wall Street Journal’s most influential executives and officials in South East Asia, said he decided to stop pouring into the real estate sector simply because the biggest investment he makes, the bigger loss he incurs.

Duc said he cannot see any signs of the recovery of the domestic real estate market, and that Hoang Anh Gia Lai would only develop real estate projects overseas, including Myanmar.

Meanwhile, Duc’s decision to quit the real estate sector, in the eyes of Nguyen Van Duc, General Director of the Dat Lanh Real Estate Corporation, is just an “unprofessional move.”

“We need to be professional when doing business. Being professional means you need to follow the business no matter what. You should try every possible ways and struggle very hard to survive the difficulties and develop. You should not run away,” Duc of Dat Lanh said.

“It’s quite unprofessional to run away any time when you meet difficulties. This is like you want to make aircraft, but you find it difficult to do that, then you decide to make trains,” he explained.

The real estate developer has also warned that it would be not easy for Duc to run away. Who will buy the real estate projects of Hoang Anh Gia Lai?

In the past, Hoang Anh Gia Lai once stated that it would be willing to buy any real estate projects from anyone. However, it still cannot buy anything. As Hoang Anh Gia Lai only wanted to buy projects at very low prices, no one sold their projects to it.

And now, Hoang Anh Gia Lai wants to sell its projects, but it would be not easy to do that, because no one wants to buy its projects at high prices.

Dr. Alan Phan, who is believed to have deep knowledge about the Vietnamese business environment, said it is a surprise to him when Hoang Anh Gia Lai leaves the real estate market so noisily. In general, when a business runs away, it would do this in a quiet manner to avoid making a great fuss on the market.

The words “enigmatic” and “odd” have been used to talk about Duc’s decision to quit the real estate market and his campaign to implement the plan. It is also really enigmatic that the person who makes such an odd move is Doan Nguyen Duc, one of the Vietnamese richest stock millionaires, the businessman described by the Wall Street Journal as one of the main players in the Vietnamese fast growing economy.

Huan Tu

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